Case Digest: Pantaleon vs American Express Bank (2010)

Facts:
AMEX is a corporation engaged in providing credit services through the operation of a charge card
system. Pantaleon was a cardholder since 1980.

Pantaleon, his wife, daughter and son went on a guided European tour and subsequently arrived in
Amsterdam. While in Coster Diamond House, his wife wanted to purchase some diamond pieces,
amounting to $13, 826. Pantaleon presented his credit card which was swiped. He was then asked to
sign the charge slip which was electronically transferred to AMEX’s Amsterdam office. However, Coster
was not able to receive approval from AMEX for the purchase so Pantaleon asked the clerk to cancel the
sale. The store manager convinced Pantaleon to wait for a few minutes and subsequently told Pantaleon
that AMEX was asking for bank references and Pantaleon responded by giving names of his Phil.
depository banks. Still, it was not approved. But Coster decided to release the items even without AMEX’s
approval since the tour couldn’t go on without them.

In all, it took AMEX a total of 78 minutes to approve Pantaleon’s purchase and to transmit the approval to
the jewelry store.

This was followed by two similar incidents when the family then had another trip to the US. They also
experienced inconvenience using the AMEX credit card in purchasing golf equipment and children’s
shoes.

When they got to Manila, Pantaleon sent a letter to AMEX, demanding an apology for the humiliation and
inconvenience. AMEX responded that the delay in Amsterdam was due to the amount involved, saying
that the purchase deviated from his established charge purchase pattern. Dissatisfied, Pantaleon filed an
action for damages in RTC.

The testimony of AMEX’s credit authorizer Edgardo Jaurique, the approval time for credit card charges
would be three to four seconds under regular circumstances. Here, it took AMEX 78 minutes to approve
the Amsterdam purchase. SC attributed the unwarranted delay to Jaurique, who had to go over
Pantaleon’s past credit history, his payment record and his credit and bank references before he
approved the purchase.
In 2009, the SC reversed the ruling in CA; and said that AMEX was guilty of mora solvendi or debtor’s
default. AMEX as debtor had an obligation as the credit provider to act on Pantaleon’s purchase requests,
whether to approve or disapprove them, with "timely dispatch."

Hence, this motion for reconsideration.

Issue: WON AMEX is liable for breach of its contractual obligations and is liable for damages.

Ruling:
Yes, AMEX is liable for breach of contractual obligation with Pantaleon and is liable for damages.

Petitioner correctly cites that under mora solvendi, the three requisites for a finding of default are that the
obligation is demandable and liquidated; the debtor delays performance; and the creditor judicially or
extrajudicially requires the debtor’s performance

Generally, the relationship between a credit card provider and its card holders is that of creditor-debtor.
This relationship already takes exception to the general rule that as between a bank and its depositors,
the bank is deemed as the debtor while the depositor is considered as the creditor.
It should be emphasized that the reason why petitioner is entitled to damages is not simply because
respondent incurred delay, but because the delay, for which culpability lies under Article 1170, led to the
particular injuries under Article 2217 of the Civil Code for which moral damages are remunerative.

We sustain the amount of moral damages awarded to petitioner by the RTC